As an independent insurance agent who has been helping families secure their financial futures for more than 15 years, I’ve witnessed firsthand how healthcare costs continue to impact our clients’ financial planning decisions. One area that consistently comes up in my conversations with clients is prescription drug coverage, particularly for those who have Aetna pharmacy benefits or are considering health plans that include prescription drug coverage.
For a complete overview, see our complete guide to term life insurance.
When we sit down to discuss term life insurance needs, many of my clients are surprised to learn that their ongoing healthcare expenses—including prescription costs—play a significant role in determining the right coverage amount. Today, I want to share insights about how understanding your prescription drug costs, whether through Aetna pharmacy benefits or other providers, can help you make more informed decisions about your term life insurance coverage.
Understanding the Connection Between Healthcare Costs and Life Insurance Planning
Over my years in this industry, I’ve learned that comprehensive financial planning requires looking at all aspects of a family’s expenses, including ongoing healthcare costs. When a family loses their primary breadwinner, they don’t just lose income—they often face increased healthcare expenses or loss of employer-sponsored benefits.
Many of my clients who rely on Aetna pharmacy benefits receive these through employer-sponsored health plans. If something happens to the primary policyholder, the surviving family members may face several challenges:
• Loss of employer-sponsored health insurance coverage • Need to secure individual health insurance plans • Potential changes in prescription drug coverage networks • Increased out-of-pocket costs for medications • COBRA continuation costs that can be substantial
When I work with clients to calculate their term life insurance needs, we factor in these potential increased healthcare costs. This approach ensures that the life insurance benefit can help maintain the family’s standard of living while covering essential expenses like prescription medications.
How Prescription Drug Costs Impact Your Coverage Calculations
In my experience helping families plan their life insurance coverage, prescription drug expenses often represent a significant portion of ongoing healthcare costs. For families with chronic conditions requiring ongoing medication management, these costs can be substantial.
When evaluating term life insurance needs, I encourage my clients to consider these prescription-related factors:
Current Monthly Prescription Costs: We calculate what the family currently spends on medications through their Aetna pharmacy benefits or other prescription drug plans. This gives us a baseline for ongoing expenses.
Potential Cost Increases: If the surviving spouse needs to find alternative health coverage, prescription costs might increase significantly. We factor in potential higher copays, deductibles, or out-of-network costs.
Chronic Condition Management: For families managing chronic conditions like diabetes, heart disease, or other ongoing health issues, prescription costs are predictable ongoing expenses that need coverage.
Specialized Medications: Some families rely on specialized or brand-name medications that may have limited coverage options outside of specific networks like Aetna pharmacy providers.
The Reality of Healthcare Transitions After Loss
One of the most challenging aspects I help families navigate is understanding what happens to their healthcare benefits when they lose their primary breadwinner. This is particularly relevant for families who currently enjoy comprehensive benefits, including Aetna pharmacy coverage through employer plans.
The reality is that COBRA continuation coverage, while available, comes with significant costs. Many of my clients are shocked to learn that COBRA premiums can cost $1,500 to $2,000 or more per month for family coverage. When we’re calculating life insurance needs, we factor in these potential costs for the 18 to 36 months that COBRA coverage might be available.
Beyond COBRA, families may need to secure individual health insurance plans through the marketplace or other sources. These plans may not include the same prescription drug networks or benefits that they previously enjoyed. A family accustomed to using Aetna pharmacy providers might find themselves needing to switch to different pharmacy networks or face higher out-of-pocket costs.
This is why I always recommend that my clients consider these potential healthcare cost increases when determining their term life insurance coverage amounts. The goal is to ensure that the life insurance benefit can help bridge these gaps during an already difficult transition period.
Practical Steps for Calculating Healthcare-Inclusive Coverage
When I work with clients to determine their term life insurance needs, we follow a systematic approach that includes healthcare considerations. Here’s the process I’ve refined over my 15+ years in the industry:
Step 1: Document Current Healthcare Costs We start by documenting all current healthcare expenses, including premiums, copays, deductibles, and out-of-pocket prescription costs. For clients with Aetna pharmacy benefits, this includes understanding their current prescription drug costs and coverage levels.
Step 2: Project Potential Cost Increases Next, we project what healthcare costs might look like if the family loses employer-sponsored benefits. This includes estimating COBRA costs, individual plan premiums, and potential increases in prescription drug costs.
Step 3: Calculate Transition Period Needs We calculate how much additional coverage might be needed to help the family maintain their healthcare during a transition period. This might include funds to cover higher premiums or prescription costs while the surviving spouse finds new employment with benefits.
Step 4: Consider Long-term Healthcare Planning Finally, we consider long-term healthcare planning needs, including potential costs for ongoing chronic condition management or prescription drug needs that may continue for years.
Term Life Insurance as a Healthcare Safety Net
Throughout my career, I’ve seen how proper term life insurance coverage can serve as a crucial healthcare safety net for families. While term life insurance doesn’t directly pay for ongoing healthcare expenses like whole life policies with living benefits might, it provides the financial resources that allow families to maintain their healthcare coverage during difficult transitions.
For families currently enjoying benefits like Aetna pharmacy coverage, term life insurance can provide the financial cushion needed to:
• Cover COBRA premiums during the transition period • Pay for individual health insurance plans if needed • Cover increased out-of-pocket costs for prescriptions • Provide flexibility in choosing healthcare providers and plans • Allow time for the surviving spouse to secure employment with benefits
The key advantage of term life insurance in this context is its affordability. Because term life insurance provides coverage for a specific period without cash value accumulation, it allows families to secure larger coverage amounts at lower premiums. This can be particularly important when factoring in potential healthcare cost increases.
Making Informed Decisions About Coverage Amounts
One of the most common questions I receive from clients is how to determine the right amount of term life insurance coverage. When we include healthcare considerations in this calculation, the process becomes more comprehensive but also more accurate.
I typically recommend that my clients consider their healthcare expenses in the context of their overall financial planning. For a family spending $500 monthly on prescription medications through their Aetna pharmacy benefits, losing those benefits could potentially double or triple their prescription costs. Over a 10-year period, this could represent tens of thousands of dollars in additional expenses.
Rather than trying to calculate exact future healthcare costs, which can be unpredictable, I help my clients think about coverage amounts that provide flexibility. Term life insurance benefits can be used however the beneficiaries need them most, whether that’s for mortgage payments, education expenses, or maintaining healthcare coverage.
Working with an Independent Agent for Comprehensive Planning
As an independent agent, I have the advantage of working with multiple insurance companies to find the best term life insurance solutions for my clients’ specific needs. This independence allows me to consider the full picture of each client’s situation, including their healthcare needs and prescription drug costs.
When clients come to me with concerns about maintaining coverage for expenses like their Aetna pharmacy benefits, I can explore multiple insurance options and coverage amounts. My goal is always to find coverage that provides adequate protection while remaining affordable for the family’s budget.
I also work closely with my clients to review their coverage periodically. Healthcare needs can change, prescription costs can fluctuate, and family situations evolve. Regular reviews ensure that the life insurance coverage continues to meet the family’s needs.
Planning for your family’s future means considering all the expenses they might face, including ongoing healthcare and prescription costs. If you’re currently relying on employer-sponsored benefits or have concerns about maintaining your healthcare coverage, I’d be happy to discuss how term life insurance can provide the financial security your family needs.
As an independent agent with over 15 years of experience, I can help you explore your options and find coverage that fits both your protection needs and your budget. Contact Heritage Life Solutions today to schedule a consultation and learn more about how proper life insurance planning can help protect your family’s healthcare security along with their financial future.
